CSI Investment Funds in Canada (IFC) Part 1 Practice Exam

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• What term refers to paper certificates or electronic records evidencing ownership of equity or debt obligations?
• Which statement best describes the investment guide's obligation to provide the best client service and refuse to sell a product that is unsuitable?
• What is the term for an aggregate that measures the quantity of money held by households, firms and governments, including M1, M2 or M3?
• Name three Canadian fund structures and a key distinction for each.
• Define a deferred sales charge (DSC) and typical vesting.
• What is the primary difference in how mutual funds and ETFs are priced and traded in Canada?
• Which measure is inflation-adjusted to compare real growth across time?
• What is the minimum rate at which the Bank of Canada lends short-term advances to chartered banks and other eligible institutions?
• Which statement best describes dollar-cost averaging?
• Which organization is responsible for clearing and settling payments among Canadian banks?
• The component of the balance of payments that includes net trade of goods and services, net payments of interest abroad and net transfers between countries is the
• Which account records the flow of payments between countries to finance the acquisition of assets such as stocks, bonds, and real estate?
• Which statement about tax treatment of distributions in RRSP, TFSA, and non-registered accounts is true?
• Which underwriting arrangement is characterized by the dealer not guaranteeing that all or part of an issue will be sold?
• What is the role of independent fund directors?
• What is the term for the total assets minus total liabilities?
• The length of time within which an investor expects an investment to satisfy their objectives is called?
• What is liquidity risk in a mutual fund context?
• Which curve illustrates the short-run relationship between inflation and unemployment?
• If a fund has a low expense ratio but still underperforms its benchmark, which statement is supported by the material?
• What is a target-date fund?
• Which phrase corresponds to the obligation to understand risk level, fees, income type, and tax consequences of funds offered for sale?
• Which term describes a fund with an unlimited number of units issued and unit value determined by the NAV of its portfolio?
• Which term represents the sum of the population aged 15 and over who are either employed or unemployed?
• What is the term for the highest price that a buyer is willing to pay for a financial instrument being quoted?
• Which policy involves deliberate government action to influence the economy through changes in spending or taxation?
• What is the marketplace where buyers and sellers of securities meet to trade, with prices established by supply and demand?
• Which item is explicitly excluded from the MER?
• Which term describes a decline in the rate of price increases, with prices still rising?
• What market is for newly issued and underwritten securities that have never been offered to the public?
• Which factor includes age, marital status, number of children, and lifestyle, affecting risk bearing?
• Which type of unemployment occurs when work is not needed in certain seasons, such as in golf courses?
• Which fund structure is traded on an exchange with market prices that can differ from its NAV?
• What is dollar-cost averaging and how can it relate to fund purchases?
• Which unemployment type occurs due to seasonal patterns in certain industries?
• Which economic condition denotes a general decline in the price level?
• Which policy framework aims to regulate money supply and credit to sustain economic growth and price stability?
• What is the primary function of Know Your Product (KYP) in the sales process?
• Which description best characterizes a sector or specialty fund?
• How are mutual fund distributions taxed in a non-registered account?
• How does a fund's expense ratio affect long-term returns?
• What is a trailer fee and who pays it?
• How does volatility relate to risk?
• Which term describes the ongoing evaluation of whether a mutual fund investment is appropriate for a client?
• Which of the following best describes vesting under a deferred sales charge (DSC) plan?
• What is Fund Facts and why is it important?
• Which GDP measure is adjusted for changes in price levels over time?
• What term describes a period of slowing growth that does not turn negative?
• What does 'since inception' performance represent?
• Which term refers to the minimum rate at which the Bank of Canada provides short-term advances to member banks?
• What is the registrant's major concern in making investment recommendations, analyzing information about client and security to determine suitability when exemptions do not apply?
• Which document primarily outlines the financial condition of the issuer, the use of funds, and the risk associated with the securities?
• How is risk tolerance used in IFC Part 1?
• What is a fund of funds (FOF)?
• A legal document that must accompany all new security issues and outlines the issuer's finances, use of funds, and risk is called a what?
• What is beta and alpha in performance measurement?
• Net trade of goods and services, net payments of interest abroad and net transfers between countries
• Risk tolerance is defined as what?
• An investment that offers investors an interest in a pool of securities, including mutual funds, is called?
• Which organization establishes, operates, and maintains systems for clearing and settlement of payments among member financial institutions on behalf of their clients?
• Which term best describes monetary aggregates?
• What must be included in a fund's prospectus?
• To an economist it means machinery, factories, and inventory required to produce other products. To an investor it may mean the total of financial assets invested in securities, a home and other fixed assets, plus cash.
• The balance of payments comprises two separate accounts recording a country's international activities. Which two accounts are they?
• What are Canadian-dollar hedged funds?
• Which term covers the size of the client's investment portfolio, employment and investment income, and periodic expenses?
• Which type of unemployment is primarily associated with downturns in economic activity causing job losses?
• What is a risk-adjusted return, and which measure is commonly used?
• Investments that provides an ownership stake in the company
• Which document serves as a concise disclosure sheet for ongoing updates to investors?
• Which of the following is NOT typically considered a financial intermediary?
• Which national self-regulatory organization oversees the proficiency, business conduct of dealer firms and their registered employees in Canada and enforces market integrity on equity marketplaces?
• What is the difference between real GDP and potential GDP known as?
• Which method involves the Bank of Canada influencing interest rates by trading securities with money market participants?
• What is Know Your Client (KYC) and Know Your Product (KYP) in fund sales?
• What is the difference between a sector fund and a diversified fund?
• Define a front-end sales charge (load).
• What term refers to the flow of payments between countries to finance acquisition of assets such as stocks and real estate?
• What is the term for the offering of shares by a company that has never issued shares before?
• Compared with actively managed funds, index funds typically have which of the following?
• NAV per unit is calculated at the end of each trading day using what inputs?
• Which inflation scenario describes a general rise in prices with the rate of increase slowing down?
• Which of the following periods is NOT typically shown when presenting fund performance?
• What is credit risk in a bond fund?
• What is a balanced fund?
• Which statement describes a no-load fund compared with a front-end loaded fund?
• What is the difference between a 'no-load' fund and a front-end loaded fund?
• What is portfolio rebalancing and why is it done?
• Which statement about open-end mutual funds is true?
• Which term best describes the documents or electronic records that prove ownership of equity or debt?
• When are mutual fund distributions typically paid?
• Which term describes a fund that pools investors’ money to invest in a diversified portfolio of securities?
• How do 'return of capital' and 'adjusted cost base' interact for tax purposes?
• Increase in the costs of production resulting in inflation
• What is the purpose of the NAV-based unit price in a mutual fund?
• What is currency risk in global funds?
• What term describes an interest rate that does not take into account the effects of inflation?
• One basis point equals 0.01 percentage points.
• A security whose price is determined by the value of some other security or asset. E.g. an option or a future
• Which unemployment type results from normal labour turnover in a healthy economy, where people enter and leave the workforce and jobs are created and terminated?
• What is the difference between a registered fund and a non-registered fund?
• Why might an investor choose a global equity fund?
• Which organization regulates the distribution (dealer) side of the mutual fund industry in Canada?
• Prices in a market are determined by supply and demand.
• Which body administers the regulatory framework surrounding Quebec's financial sector, including the securities, financial institution and compensation sectors?
• What is the term for the interest rate at which Canadian financial institutions lend each other money on an overnight basis?
• Which unemployment arises from a mismatch between workers' skills and available jobs?
• A monetary policy that decreases the money supply, usually with the intention of raising interest rates and combating inflation.
• How is fund performance typically presented to investors?
• A mutual funds advisor must use due diligence to learn essential facts relevant to every client and order, including income and net worth, family commitments, and goals. This is known as?
• Which statement best defines an index fund?
• What is ex-distribution?
• Capital means different things to economists and investors. In investor terms, it may mean the total of financial assets invested in securities, a home and other fixed assets, plus cash.
• Which statement best contrasts an active fund with an index fund?
• What is the measure of the market value in current dollars of all goods and services produced domestically in a year?
• Which term describes securities that generate predetermined periodic interest or dividend income, including government and corporate bonds, mortgages, and preferred shares?
• What is the MER and what costs does it cover?
• Which of the following is a standard performance metric commonly reported for mutual funds?
• How is NAV per unit calculated for a mutual fund?
• Which statement best describes what annual fund reports typically include?
• Which statement correctly describes the real interest rate?
• Which policy instrument is used to influence short-term interest rates by trading securities?
• What is a key trade-off of hedged funds?
• What is a global or international fund?
• Who would most likely be responsible for advising clients on mutual fund products within their licensed territory?
• When performance is described net of fees, what does this mean?
• Which inflation occurs when demand is greater than supply and inflation results?
• Which statement defines the real interest rate?
• What is the impact of a return of capital on tax reporting?
• Which of the following statements correctly describes the purpose of the Fund Facts disclosure sheet?
• What is the purpose of annual and semi-annual reports for mutual funds?
• A short mutual fund document giving investors key information including fund details, performance history, investments, and costs is called?
• Why are Fund Facts used to compare funds rather than only the prospectus?
• What is the term for the lowest price at which a seller is willing to accept for a financial instrument being quoted?
• What term is associated with the potential for variability in investment returns? The source equates volatility with risk.
• Which organization regulates the distribution side of mutual funds in Canada and oversees dealer conduct?
• Which term describes an economic indicator used to predict the next phase of the business cycle, often including stock prices, money supply, housing starts, and new orders?
• What is the typical settlement period for Canadian mutual fund trades?
• What is NI 81-102?
• Which unemployment category results from time spent by people searching for new jobs or transitioning to new careers?
• Which term best defines the obligation to ensure recommendations match client risk and goals?
• Investments that provide an ownership stake in a company are known as what?
• Which term describes the aim of fully understanding and satisfying the unique needs of each client?
• Which term describes a policy that uses government spending and taxation to influence economic activity?
• A market in which securities are bought and sold over the counter in which dealers act as principals when buying and selling securities for clients. Also referred to as the unlisted market.
• What is the term for the economy's output when all resources are fully employed?
• Which curve is used to depict the short-run trade-off between inflation and unemployment?
• Which term refers to the process of learning a client's financial status, family, commitments, and goals to inform investment orders?
• Which market is a large computer network through which investment dealers negotiate transactions; most bonds trade there, and some stocks as well?
• Which market would you be in when a company issues new shares to raise capital for the first time?
• Which term refers to the regulatory or firm policies governing how client information and disclosures are handled?
• Who is licensed to sell and provide advice on mutual fund products to clients in the province or territory where licensed?
• Which entity is responsible for setting and monitoring continuing education requirements and for enforcing a code of ethics in the province of Quebec?
• In an RRSP, when are distributions taxed?
• Which document is designed to give investors key information about a fund, including the fund's objectives, performance history, holdings, and costs?
• What is the primary purpose of risk disclosure in a fund prospectus?
• What is a unit equal to 1/100th of 1% called?
• What is a redemption fee (or exit fee) and when might it apply?
• How does interest rate risk affect bond funds?
• What is a money market fund?
• What is return of capital and how does it affect tax?
• What term refers to the regulation of the money supply and available credit for promoting sustained economic growth and price stability?
• Which concept is described as the degree of price fluctuation of an investment?
• Which term describes unemployment that rises during economic downturns and falls when the economy improves?
• Which statement about currency hedging in global funds is true?
• Which concept describes the client's reason for selecting an investment, such as growth or safety, or liquidity?
• What does the term 'fund manager identity' refer to in a prospectus?
• At this level, the economy is thought to be operating at full capacity. Which concept is this?
• Which bond fund duration is more sensitive to interest rate changes?
• An economic indicator that measures the change after an economy has passed through a phase in the business cycle, including unemployment, private sector equipment spending, labour costs, inflation rate, and related interest rates.
• Which term refers to the total money in circulation across households, firms and government, categorized by liquidity levels?
• Which term includes timely disclosure of material changes in a company's affairs and examination of prospectuses to ensure full, true and plain disclosure?
• Which is a mutual fund whose shares are issued and redeemed by the investment company at the request of investors?
• What distinguishes an equity fund from a fixed-income fund?
• Suppliers and users of capital access the markets through the chartered banks, trust companies, life insurance companies, and investment dealers. These financial intermediaries can be either deposit taking or non deposit taking institutions.
• Which measure represents the economy's potential output at full employment?
• What term measures the periodic change in returns relative to the average return, with greater changes indicating higher risk?
• Which organization is responsible for market integrity rules regarding trading activity on Canadian equity marketplaces?
• What is true about liquidity in Canadian mutual funds?
• Which statement about MER is accurate?
• Which term describes the professional who provides guidance and strategies to help clients achieve financial goals, potentially beyond selling funds?
• A professional with a recognized designation who assists clients in establishing and reaching financial goals beyond mutual funds sales rep is called?
• Why is diversification important in fund selection?
• Which market is for securities that have previously been sold by the issuer?
• The process in which a new issue is purchased by an investment dealer and the dealer bears the risk that the issue will be sold at the desired price is called
• What describes the portion of one year's GDP that must be sacrificed to reduce inflation by 1 percentage point?
• Which policy seeks to expand the money supply to encourage economic growth or combat inflationary price increases?
• Which term refers to the aggregate savings from retail, institutional, and foreign investors that fund investments?
• Which term describes savings from retail, institutional, and foreign investors that fund investments?
• Which term is most directly involved with gathering data such as income, net worth, and investment goals to determine suitability for investment recommendations?
• Which policy is aimed at increasing the money supply to stimulate economic growth?
• Economic indicators that behave similarly and simultaneously with the economy. Includes GDP, personal income, and retail sales